Lucky Cement Corporation

Earnings Conference

2017/12/11

Disclaimer

The contents of this presentation are based on the financial statements reviewed or audited by the accountants. The financial statements are prepared in accordance with IFRS. Please refer to the financial statements of Lucky Cement Co., (the Company) for the complete contents and data. The forward-looking statements contained in this presentation are subject to risks and uncertainties and actual results may be different. This presentation is not expressly or implicitly expressed or warranted to be correct and complete, nor does it represent a complete discussion of the Company's subsequent or consequential significant developments. The Company is not responsible for the updating and revising of any forward-looking statements.

Agenda

1. Company Profile

3. Locations

2. Products &

Circular Economy

5. CSR

6. Future Development

7.Q&A

4. Market &

Performance

Logo Story

Mr. Chen Liang-Chuan, the founder started his business in housing construction. He hopes that every young person who wants to get married could have a house, and their life could feel warm and happy. Therefore, the life's goal of Mr. Chen Liang-Chuan is to produce cement with high quality and reasonable price to build a house.

Company Profile

Paid-in Capital：NT$4,047,380,490

Date of Establishment : May 7, 1974

Company Name : Lucky Cement Corporation

Listed Date : June, 1990

Plants：Dongao Plant , Puxin Plant, Horen Plant

Head Office : 15F, 237 Songjiang Rd., Taipei, Taiwan

Chairman：Mr. Chen Liang-Chuan

Stock Code : 1108

Company Milestone

5/7/1974 Lucky

Cement Co.,

established

2000 Started Circular

Economy

1992 Merged

Puxin Plant

1990 Listed on

TWSE

1981 Dongao Plant

started to operate

2008 Horen plant Completed

phase 2 expansion

2008 ISO9001:2008

Certified

Subsidiaries

Fuyu Development Company

Luckyship Marine Co., Ltd

Dasheng Enterprise Co., Ltd.

Luckicon Ready-mixed Concrete Factory Co., Ltd

Lucky Cement Corp., Japan

Agenda

1. Company Profile

3. Locations

2. Products &

Circular Economy

5. CSR

6. Future Development

7.Q&A

4. Market &

Performance

Products & Circular Economy

Cement: Portland I & II

Circular Economy : Replace fuel and raw materials

Slag Powder

Stone

limestone

Aggregates

Quicklime

Sales Revenue Proportion

Cement 68%

Slag Powder

2%

Quicklime 2%

Circular Economy

6%

Stone 22%

Resource: Sales Revenue from Jan. 1,2017 to Sep. 30

Agenda

1. Company Profile

3. Locations

2. Products &

Circular Economy

5. CSR

6. Future Development

7.Q&A

4. Market &

Performance

Locations

Dongao Plant

Puxin Plant

Horen Plant

Plants

Branch Office

Storage & Transportation Station

Hualien

Wudu Taipei

Taichung Yilan

Kaohsiung

Taoyuan

Agenda

1. Company Profile

3. Locations

2. Products &

Circular Economy

5. CSR

6. Future Development

7.Q&A

4. Market &

Performance

Cement Supply & Demand

16.8 15.8

16.6

14.6 13.4

12.1

8.2

12.3 12.0 12.2 12.6 11.7

10.2

7.6

0

2

4

6

8

10

12

14

16

18

2011 2012 2013 2014 2015 2016 2017 Jan-Sep

Production

Consumption

Million tons

Resource : Taiwan Cement Manufacturers’ Association

Average Cement Consumption

523

1,332

531

516

524

536 496

435

0

200

400

600

800

1000

1200

1400

1977 1993 2011 2012 2013 2014 2015 2016

1993 highest record 1,332 KG/per person 2016 Lowest record 435 KG/per person

Unit: KG

The Statistics of Building License

and Construction License

34.15 32.88

39.76 38.63

32.60

26.24

13.31

25.29 26.89

28.69 31.34

25.35 20.82

10.95

0

5

10

15

20

25

30

35

40

45

2011 2012 2013 2014 2015 2016 2017 Jan-Jun

Building License

Construction License

Unit: Millions M²

Resource : Construction and Planning Agency, Ministry of the Interior

Cement Market Share

8.14

7.51

7.35

7.34

8.46 8.72

9.65

9.51 9.57

9.68

9.04

5

6

7

8

9

10

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Jan-SeP

%

0

200

400

600

800

1,000

2012 2013 2014 2015 2016

Gross Profit

Operating Profit

Profit

Operating performance

Unit: NT$ Millions Consolidated Statements of Comprehensive Income

2012 2013 2014 2015 2016

Revenue 4,190 4,870 5,099 5,021 4,251

Gross Profit 350 542 739 906 662

Operating Income 38 271 441 624 426

Profit 180 163 367 463 315

Unit : NT$ Millions

Operating performance

Consolidated Balance Sheets

2014 % 2015 % 2016 %

Current Assets 5,562 66% 5,213 66% 5,361 66%

Property, Plant, and Equipment

2,300 27% 2,157 27% 1,900 25%

Total Assets 8,363 100% 7,856 100% 7,753 100%

Current Liabilities 2,334 28% 1,825 23% 2,605 34%

Total Liabilities 3,748 45% 3,010 38% 2,951 38%

Total Equity 4,615 55% 4,846 62% 4,802 62%

Unit : NT$ Millions

Operating performance

2017 2017 Q1 2017 Q2 2017 Q3

Revenue 895 867 830

Operating Costs 814 787 786

Gross Profit 81 80 44

Operating Expenses 53 58 55

Operating Income 28 22 (11)

Non-Operating Income and Expenses (5) (4)

Profit before Tax 23 18 (11)

Tax Expense 4 8 (3)

Profit 19 10 (8)

Other Comprehensive Income (13) (7) (2)

Total Comprehensive Income 6 3 (10)

EPS 0.05 0.02 (0.02)

Unit: NT$ Millions, Except earning per share

0%

5%

10%

15%

20%

300.00

500.00

700.00

900.00

1,100.00

1,300.00

2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3

Revenue Gross Margin

Operating performance

Period 2016

Q1 2016

Q2 2016

Q3 2016

Q4 2017Q1 2017Q2 2017Q3

Revenue 995.64 1,109.33 1,055.51 1,090.58 894.90 867.56 830.41

Gross Margin

19 % 17 % 15 % 11 % 9 % 9 % 6 %

Unit : NT$ Millions Consolidated Financial Information

Unit : NT$ Millions

Operating performance

0%

5%

10%

15%

20%

300.00

500.00

700.00

900.00

1,100.00

2017 Q1 2017 Q2 2017 Q3

Revenue Gross Margin

Period 2017 Q1 2017 Q2 2017 Q3

Revenue 894.90 867.56 830.41

Gross Margin 9 % 9 % 6 %

Consolidated Financial Information Unit : NT$ Millions

Unit : NT$ Millions

Agenda

1. Company Profile

3. Locations

2. Products &

Circular Economy

5. CSR

6. Future Development

7.Q&A

4. Market &

Performance

CSR

Corporate Sustainability

Value Chain

Society

Employee

Circular Economy

Environment Protection

1. The Company has fair salary system, employee benefits policies, labor safety and health system, and implements the concept ,"respect for life and pursuit Zero disaster ", to create a harmonious labor relations.

CSR

2. Various staff education and training, enhance staff skills, and fulfill human resource development

3. Diverse complaints mechanism ensure labor rights.

CSR 1. Assist local resident and native people in employment

2. Provide Lucky cement scholarship and sponsor a variety of school activities

3. Emergency assistance for villagers 4. Volunteer for community services including road

maintenance and beach clean

5. Assist community building activities

CSR

Certificate of recognition from our sponsored groups

1. Cement industry is the heart of circular economy. Through 1400℃ of high temperature and other characteristics, the production process can reduce Toxic gas (such as dioxin). It will be helpful to reduced Greenhouse effect.

CSR

2. Waste heat recovery is applied to reduce the usage amount of fuel.

3. That Waste of resources replace raw materials becomes possible through investing in R&D and managing in production process. We can not only reduce natural resource consumption but also keep product quality. This will be helpful to achieve circular economy.

Circular Economy

CSR

2. Using waste oil to replace fuels can reduce coal consumption about 1,700 tons per year. Using flue gas desulfurization gypsum from power plants can reduce the imported natural gypsum 29,000 tons per year. Both are helpful to slow down natural resource consumption.

Results of Circular Economy:

3. Excavation soil from construction, organic sludge, inorganic sludge, water treatment sludge, coal ash, waste cast sand and contaminated farmland soil can replace part of clay. It is helpful to ensure the recycling of material resources, restrain natural resource consumption, reduce the environmental load, and make the industrial economy sustainable.

1. Reduce 1,610 tons of carbon dioxide emissions per year.

CSR

Suppliers： We work with suppliers to improve corporate social responsibility, promote sustainable development of the environment, improve labor rights, safety and health, to safeguard basic human rights.

Customers： With professional services and excellent product quality, we establish customer-oriented quality system to pursue a win-win goal for customers and the Company.

Customer Service Satisfaction is 93.63 % in 2016.

CSR

1. Greening in plants

2. Improve air pollution Prevention by replacing old equipment

3. Implement energy-saving policies by upgrading production equipment.

4 Use recycling water in production process and carwash. 清水

貯水池

Agenda

1. Company Profile

3. Locations

2. Products &

Circular Economy

5. CSR

6. Future Development

7.Q&A

4. Market &

Performance

Future Development

The Legislative Yuan approved the Forward-looking Infrastructure Development Program, the program will last four years and be planned to spend NT$420 billion (US$13.7 billion) in five major construction projects including light railways, water projects, green energy, digital infrastructure, and rural and urban construction. The infrastructure projects will be helpful to drive the cement demand, and the Company will seize this opportunity.

Future Development

Cement industry has become an important role in circular economy. We must do our best to fulfill the responsibility of citizens of the world. Through the reuse of resources and energy, we will achieve a win-win goal for both enterprises and the environment , and contribute ourselves to protect sustainable environment.